Setting up a business in the UK with an offshore corporate structure : Limited company, LLP or International Holding
Please either call our London office direct on +44 (0)20 7801 3112 or complete our contact sheet to discuss how Access Business UK can assist you with your business objectives.
Access Business UK offers from simple and efficient turnkey solutions to customised incorporations and company management services for both UK and offshore corporate structures.
The Limited company has become a powerful tool in promoting entrepreneurship and stimulating inward investment in the UK due to its simple formation procedures. Swift to incorporate and easy to manage, the Limited company is as efficient for sole trading structures as SMEs and in particular for trade or services activities.
The capital of a Limited company can be declared as a minimum of £ 2, but the issued capital corresponds to your true contribution. A limited company is normally delivered with its first two £ 1 shares paid up; the other shares can be allotted. An increase in capital can easily be made. Capital is generally issued to show stability of the company.
Administrative and regulatory compliance of a Limited Company is fairly straightforward. In addition, to favour simplified accounting obligations: the company does not need to be registered for VAT if its turnover does not exceed £61,000 in one tax year. You also have the advantage of an extra 9 months in your first tax year in which to prepare your company accounts and transmit them to Companies House and HM Revenue and Customs.
The United Kingdom boasts one of the lowest taxation rates of the European Union.
The LLP is widely used in international business and tax planning because it has the advantage of limited liability but the characteristics of a partnership for tax purposes. It is a perfect corporate vehicle for the international businessman who is not resident in the UK and who wishes to trade outside the United Kingdom.
Profits are divided among the members, in proportion to their respective holdings, and are taxed in their hands. To maintain a limited liability status the partnership must be a commercial venture operating with a view to making a profit.
Has the flexibility of a Company but is taxed as a partnership
In some circumstances, if all the members or partners are non tax resident in UK and no business is undertaken in UK, neither the LLP Company nor the members will be subject to tax in the company's country of establishment.
The members’ exemption from UK tax is only applicable provided that no business or trade is carried out with or within the United Kingdom.
Both for individual or corporate members. This can make it particularly advantageous even for partners in jurisdictions that have not signed double taxation agreements.
The relatively new UK Holding Company structure has many competitive advantages over the famous International Holding Company regimes of the European continent such as Denmark, Luxemburg, The Netherlands and Switzerland. Not only does the UK have a wider network of double tax treaties than its main competitors; there is no capital duty, no minimum paid-up share capital requirements and no dividend withholding tax regime.
The UK grants double tax relief by way of a credit for foreign corporation tax on all dividends paid to the Holding by a foreign subsidiary country having signed a double tax treaty with Great Britain. If the foreign company is subject to a corporate tax rate of 30% or more, the credit will usually be a complete relief from UK corporation tax.
The UK Holding Company benefits from the EU Parent/Subsidiary Directive, whereby withholding taxes on intra-EU dividends are eliminated altogether provided the Holding Company has a minimum of 25% of the shares of the filial. Furthermore, the UK does not impose any withholding tax on dividends distributed by resident companies to UK non-resident shareholders, irrespective of their residence.
No distinction is made between capital gains and other income. All income is taxed at the corporate tax rate. However, since capital gains are not levied on non-residents, there is no tax levied on the sale of shares of a UK subsidiary of a non-resident parent company.
In this instance, a corporate non-resident parent company, even outside the double tax treaty can be an extremely efficient tool in international tax planning.
For a company to benefit from the above exemptions, the following requirements must be observed:
* For withholding tax on dividends and relief on EU subsidiary revenue
The Holding company must hold at least 25% of the subsidiary
** For capital gains tax exemption